Tennessee’s Law and Health Agencies Cracking Down on Hemp, While State Industry Expands

Tennesseeâ€™s health and law enforcement agencies are starting to crack down on a product that is being promoted by farm officials â€” industrial hemp. Â Now, early investors in this expanding industry are realizing they might be violating the law, even though they thought they were in the clear.

David Duncan owns Music City Hemp Store. And this October, his entire inventory was stolen. Now heâ€™s wondering: â€śWho the hell would do that â€¦ and why?â€ť

Duncan says heâ€™s come to only one conclusion: Those criminals must have been confused.

But hemp burglary, is not a singular case in Tennessee. In recent weeks, a Stewart County grower chased off heavily armed men, after they attempted to steal his crops. That same day, another burglar tried to take his plants.

This is odd, Duncan says, because hemp is not â€śsome black-market drug.â€ť The CBD oil he sells has less than 0.3 percent of psychoactive chemical THC.

â€śSo, youâ€™re stealing medicine that doesnâ€™t get you high, and if you knew that why would you do it?â€ť said Duncan. â€śWhat are you going to do with these, dude?â€ť

But, the stateâ€™s Department of Health appears to share the same view that hemp oil is an illicit drug. It released a warning in September citing the adverse health effects of marijuana and hemp. And, signed on to it was the Tennessee Bureau of Investigation.

â€śI mean when I looked at that I thought, ‘It’s a bunch of hooey,â€ť said Duncan, who says he sent the advisory to others in the hemp community, asking if they had seen it.Â Â

Legal gray area

Duncan and other hemp sellers believe their product is perfectly legal in Tennessee. But, in certain situations it might not be.

In 2014, the national farm bill technically legalized industrial hemp. But, the legislation failed to make a clear distinction on one key point, says David Waddell, the Department of Agriculture legal counsel.

â€śThey did not change the definition of a controlled substance under the Controlled Substances Act. It still says anything that is from the cannabis plant is marijuana,â€ť says Waddell.

So, under current U.S. drug policy, all cannabis varieties â€” including hemp and marijuana â€” are considered illegal controlled substances. And, the farm bill provides a narrow exemption for state authorized pilot programs.

This means industrial hemp is only legal in the state under certain conditions. For CBD store owners, THC levels are not the only concern. The hemp also has to be sourced from a licensed farm in Tennessee. And if itâ€™s from out of state, that farm also had to have been licensed by a state agriculture department.Â Â

Otherwise, CBD is technically marijuana under the law.

State agencies must now consider an enforcement framework

This legal quandary has presented a tricky situation for the stateâ€™s top law and health officials, says Waddell. Thatâ€™s because itâ€™s hard to tell where CBD comes from.

â€śThe kinds you buy in the store or over the internet or wherever. Itâ€™s hard to tell whether it came from out of state, or one of our licensed growers,â€ť he said.

But, Waddell says the program has been a great source of income for farmers. The Agriculture Department gave out 226 new licenses to grow hemp this year. The number goes up annually; only 79 farmers were licensed in 2017. And as of September, there are 101 industrial hemp processors that have been permitted through the program.

About 60 percent of those farmers are growing hemp to produce CBD oil, say Waddell.Â

This is unexpected, says David Reagan, the chief medical officer for Tennesseeâ€™s Department of Health.

â€śOur understanding when the legislation passed was that hemp was primarily an industrial fiber,â€ť he said. â€śAnd there was not much discussion of the commercialization of the medical treatment using CBD oil. So, this is a new development.â€ť

Reagan warns many of these CBD products are not approved by the FDA. Â So, now officials are having to figure out a legal approach after the fact.

And, â€śThis is relatively a new process,â€ť says Tommy Farmer, a special agent overseeing a dangerous drugs task force at Tennesseeâ€™s Bureau of Investigation. â€śWeâ€™re all trying to work together and weave our way through to make sure we follow the law.â€ť

He says the Tennessee Bureau of Investigation has been looking into stores with CBD products, but currently the state’s crime lab cannot test for THC levels. And that’s made enforcement nearly impossible.

In February, police in Rutherford County padlocked 23 businesses and confiscated inventory. It was part of a sting known as â€śOperation Candy Crush.â€ť Owners were indicted on a variety of charges, including felony drug sale. Those ended up getting droppedÂ for lack of evidence.

But, Farmer says, law enforcement will continue to keep an eye out. So, he adds, those deciding to invest in the hemp industry need to lawyer up.

â€śIf theyâ€™re going to be shipping and theyâ€™re going to be selling these products. I would say they better discuss it with their counsel before they do so,â€ť said Farmer.

But, soon the federal government could settle the matter. A new farm bill is in the works. One version of it would redefine hemp as an ordinary agricultural product.Â